You might hear various business and economic reports and statistics about China.  To be sure, all of the reports that we have heard from government sources around the world for more than a year now have been too sugar-coated, so it is not just China that you have to worry about.

However, being in country, we pick up the nuances that really tell the story.  Guangzhou, in the Pearl River delta region, is at the heart of the Chinese export markets.  Many things for export are made in Guangdong Provence, and you can get those things and things from other provinces at the markets, in Guangzhou.  Guangzhou also has one of the most famous twice-yearly export trade fairs (Canton Fair).  There are many traders, in Guangzhou, from all over the world.  In fact, those are the majority of the foreigners living here. 

First, since last summer, it seems that there are substantially less traders seen on the streets, in our neighborhood.  Then, in the fall, attendance at the Canton Fair was down by about one-third.  The official figures at the end of the year showed China's exports down about 20 percent, year over year, in the most recently reported period.

Some more recent non-traditional indicators that might give even more insight into the reality are as follows.  We have a friend from Taiwan who sells coffee to cafés and actually helps people set up new cafés.  Xiao Bei Lu is a street where many of the traders go to shop, as it has many markets for various kinds of goods, and it is on the eastern edge of the area of Guangzhou where the many of the markets are located, and the Canton Fair, in fact, used to be held at a convention center in the heart of that area.  Our café baron friend recently told us that is business in the Xiao Bei Lu area is down two thirds from last year.  Then, with the spring trade fair right around the corner, we had also been calling around to the local hotels, in case any of our foreign contacts wants to book rooms for the fair, and many of the hotels have told us that they have decreased prices to try to attract business for the trade fair and there are still plenty of rooms available. 

You can read more about our thoughts about business, investment, art, arbitrage and China on our website Red Hill Capital, In Country China and Leona Craig